For Americans planning to retire soon, having $1 million in savings might seem like enough, but depending on where someone decides to spend their post-working years, that money may or may not go very far.
A new study from Go Banking Rates analyzed how long a $1 million retirement fund will last nationwide.
The study assumed a retirement age of 65 or older and examined the annual cost of living expenses, such as housing, utilities, and food, in all 50 states. Researchers used the latest data from the Bureau of Labor Statistics’ 2020 Consumer Expenditure Survey and the Missouri Economic Research and Information Center.
In some states, like Mississippi and Oklahoma, a $1 million retirement fund would last about 22 years.
In other states like New York and Hawaii, which already have high cost of living expenses, the $1 million retirement fund would last less than 15 years.
For retirees in California, the annual cost of living expenses would be $72,319.57, meaning a $1 million retirement fund would last for about 14 years.
Retirement can often last 25 years or more, according to Fidelity.
Financial experts shared that $1 million may not have the same longevity as it once did in certain states due to changing factors like inflation.
It’s important to note that retirement funds will look different for everyone. Experts and financial institutions, like Fidelity, recommend that people put away about 15% of their annual income for retirement.
But it’s ok if that amount isn’t feasible for everyone to do. Fidelity still recommends people put away at least 1% of their annual income until they reach that 15% mark.
The full Go Banking Rates study can be viewed here.